Group 1 - The SP2509 contract experienced significant volatility in July, rising from 5080 points to a peak of 5560 points, an increase of 9.4%, followed by a decline of 6.1% in the last week [1] - The macroeconomic factors are driving the market more than the fundamentals, as indicated by the stable pulp spot market and weakening basis [1] - Global economic indicators, such as Citigroup's Global Surprise Index, have remained above zero this year, with most data exceeding expectations [1] Group 2 - In June, China's social financing increased by 4.20 trillion yuan, marking seven consecutive months of year-on-year growth, supporting the logic of a strong macroeconomic environment [1] - The supply of hardwood pulp has decreased compared to softwood pulp, while downstream consumption continues to rise, indicating a better fundamental outlook for hardwood pulp [1] - The price spread between hardwood and softwood pulp is expected to narrow from -174 points to -1211 points by the second half of 2024, reflecting an improvement in hardwood pulp fundamentals [1] Group 3 - The softwood pulp supply side is underperforming, with a sales-to-inventory ratio of 0.92 in Europe for June, leading to seven consecutive months of inventory accumulation [1] - Domestic imports of softwood wood chips and pulp reached 793,000 tons in June, marking a marginal increase for seven consecutive months, which negatively impacts SP valuations [1] - The domestic paper industry is facing ongoing operational pressures, with total profits decreasing by 21.4% year-on-year in June and total losses increasing by 29.8% year-on-year [1] Group 4 - In May, electricity consumption in the paper industry was 846 million kilowatt-hours, a year-on-year decrease of 2.1%, falling below the average of 875 million kilowatt-hours for the previous year [1] - By the end of July, the paper industry issued an anti-involution initiative, aiming to reduce finished paper production, limit wood pulp capacity expansion, and improve the quality of finished paper [1] - Overall, the market fundamentals are considered average [1]

Report Overview - Report Title: Pulp Weekly Report (Week 2, July 2025) [1] - Analyst: Pan Shengjie from the Commodity Research Institute [2] Report Industry Investment Rating - Not provided in the report Core Viewpoints - The pulp market fundamentals are stabilizing [3] - The supply - demand relationship in the pulp market has not improved significantly, and weak demand restricts the rebound of pulp prices [4] - Global pulp market shows a growth trend in the past five months, especially the domestic market [4] Summary by Directory Pulp Market Fundamentals - This week, the spot prices of imported wood pulp varied. Imported softwood pulp prices rebounded from the bottom, narrowing the decline of the average price; imported hardwood pulp prices rose due to non - standard basis quotes and low - price reluctance to sell; the supply - demand relationship did not improve significantly, and the demand was weak; imported natural pulp and chemimechanical pulp prices followed the decline of imported softwood pulp prices [4] - From the monthly hardwood pulp balance data, the current fundamentals are favorable for the relative strength of hardwood pulp. The cost support for the hardwood - softwood price spread in July has improved [4] - Trump's new tariff policies push the US economic policy uncertainty index to a record high. The US tariff policy on Brazil may increase Brazil's hardwood pulp exports to other regions and is negative for the basis of Brazilian hardwood pulp. The US tariff on Canada is expected to be negative for the basis of Canadian softwood pulp [4] - As of May, global pulp shipments decreased by 1.7% year - on - year. Softwood pulp shipments decreased by 8.2% year - on - year, while hardwood pulp shipments increased by 3.1% year - on - year. However, the cumulative shipments in 2025 still had a nearly 10% year - on - year increase. The global pulp industry's operating rate was close to 90% for the second consecutive month in May, but it also brought inventory pressure. In May, softwood pulp inventory increased by 5 days to 46 days, and hardwood pulp inventory increased by 4 days to 51 days. The domestic paper - making enterprises' finished - product inventory decreased by 0.2% year - on - year in May, the first year - on - year decrease since April 2024 [4] Impact of Softwood Supply on SP Unilateral - As of May 2025, European bleached softwood kraft pulp inventory decreased by 238,000 tons month - on - month, consumption increased by 269,000 tons month - on - month, and the inventory - to - sales ratio was 0.89 times. The average value in the past 12 months increased by 4.7% year - on - year, with continuous marginal inventory accumulation for 6 months, which is negative for SP unilateral but with limited impact [11] - Domestic softwood chip imports increased for two consecutive months, reaching 21,000 tons (equivalent to 11,000 tons of pulp). Softwood pulp imports decreased for two consecutive months, reaching 821,000 tons. The total long - fiber imports were 832,000 tons, with a 4.3% year - on - year decrease in the cumulative value in the past 6 months, and the decline has been narrowing for 7 months, which is negative for SP unilateral but with limited impact [11] Impact of Hardwood Supply on Hardwood - Softwood Price Spread - As of May 2025, hardwood chip imports increased by 1.289 million tons month - on - month, equivalent to 644,000 tons of pulp; hardwood pulp imports increased by 1.309 million tons month - on - month. Softwood chip imports increased for two consecutive months, reaching 21,000 tons, equivalent to 11,000 tons of pulp; softwood pulp imports decreased for two consecutive months, reaching 821,000 tons. The short - fiber to long - fiber import ratio was 2.35 times, with a 10.5% year - on - year increase in the average value in the past 12 months, and the growth has been narrowing for 4 months, which is positive for the hardwood - softwood price spread [18] - The use of hardwood pulp in domestic paper decreased by 2.224 million tons month - on - month, and the use of softwood pulp decreased for three consecutive months, reaching 523,000 tons. The consumption ratio was 4.26 times, with an 8.0% year - on - year increase in the average value in the past 9 months, and the growth has been expanding for 8 months, which is positive for the hardwood - softwood price spread [18] Impact of International Pulp and Paper Trade on SP Unilateral - As of May 2025, domestic pulp import value increased by $1.906 billion month - on - month, and the US pulp import value decreased by $308 million month - on - month in April. The combined value (with a one - month lag) was $2.214 billion, with a 3.6% year - on - year decrease in the cumulative value in the past 3 months, and the decline has been expanding for 2 months, which is negative for SP unilateral but with limited impact [23] - The total export value of paper products from Japan, South Korea, and Brazil was $565 million, with a 5.4% year - on - year decrease in the cumulative value in the past 3 months, and the decline has been expanding for 2 months, which is negative for SP unilateral with full impact [23] Impact of Port Inventory on SP Unilateral - As of July 11, 2025, the total inventory of four ports and warehouse receipts was 2.378 million tons, with a 9.3% year - on - year increase, and continuous marginal inventory accumulation for 9 months, which is negative for SP unilateral [29] Impact of Port Inventory on Hardwood - Softwood Price Spread - As of July 11, 2025, the ratio of the four - port inventory to warehouse receipt inventory increased for four consecutive months, reaching 8.94 times. The average value in the past 6 months increased by 60.7% year - on - year, and the marginal inventory decreased for 3 months, which is relatively negative for hardwood pulp [34] Impact of Manufacturing PMI on SP Unilateral - As of June 2025, China's manufacturing PMI increased for two consecutive months, reaching 49.7 points, with a 0.2% year - on - year increase in the 12 - month average value, and the growth has been narrowing for 3 months. The US manufacturing PMI increased month - on - month, reaching 49.0 points, with a 1.3% year - on - year increase in the 12 - month average value, and the growth has been narrowing for 10 months, which is negative for SP unilateral [42] Impact of Domestic Paper Production and Inventory on SP Unilateral - As of April 2025, domestic paper industry electricity consumption decreased month - on - month, reaching 838 million kWh, with a 0.6% year - on - year increase in the cumulative value in the past 12 months, and the growth has been narrowing for 9 months, which is negative for SP unilateral [50] - Domestic paper industry finished - product inventory increased for four consecutive months, reaching 77.57 billion yuan, with a 5.6% year - on - year increase in the average value in the past 12 months, and continuous marginal inventory accumulation for 13 months, which is negative for SP unilateral [50] Impact of US Economic Policy and International Oil Price on SP Unilateral - As of July 2025, the US economic policy uncertainty index increased month - on - month, reaching 435.3 points, with an 82.8% year - on - year increase in the average value in the past 12 months, and the growth has been narrowing. Brent crude oil price decreased month - on - month, reaching $69.1 per barrel, with a 20.9% year - on - year decrease in the average value in the past 3 months, and the decline has been narrowing, with marginal strengthening, which is positive for SP price [56] Impact of International Trade and US Dollar Index on SP Unilateral - In May, China's total import and export volume decreased month - on - month, reaching $529 billion, with a 2.1% year - on - year increase in the cumulative value in the past 6 months, and the growth has been narrowing for 2 months, which is positive for SP valuation [57] - In June, the real broad - based US dollar index decreased for five consecutive months, reaching 114.9 points, with a 5.7% year - on - year increase in the average value in the past 9 months, and continuous marginal increase for 16 months, which is negative for SP unilateral. The general cycle of the US dollar index is 22 months [63]

Report Industry Investment Rating - Not provided in the given content Core Viewpoints - The adjustment of SP futures contract rules expands the scope of hedging, attracting more funds [59] - The growth rate of social inventory has accelerated, which is relatively unfavorable for all non - standard spot goods including broadleaf pulp [59] - The broadleaf pulp has stabilized, and the spread between broadleaf and softwood pulp has strengthened [59] - The domestic papermaking industry mainly uses more broadleaf pulp, but overall it still faces great challenges [59] - The domestic manufacturing data is better than that of the United States, which is relatively positive for SP, but there is more downside space for pulp prices [59] - The pulp market fundamentals are weak [59] Summary by Directory Coniferous Supply Impact on SP Unilateral - As of May 2025, European bleached softwood kraft pulp inventory decreased month - on - month to 238,000 tons, consumption increased month - on - month to 269,000 tons, and the inventory - to - sales ratio was 0.89 times, with a 4.7% year - on - year increase in the average of the past 12 months, which is bearish for SP but with limited impact [9] - As of May 2025, domestic coniferous wood chip imports increased for two consecutive months to 21,000 tons (equivalent to 11,000 tons of pulp), coniferous pulp imports decreased for two consecutive months to 821,000 tons, and the total long - fiber imports decreased by 4.3% year - on - year in the past 6 months, which is bearish for SP but with limited impact [9] Broadleaf Supply Impact on Broadleaf - Coniferous Spread - As of May 2025, broadleaf wood chip imports increased month - on - month to 1.289 million tons (equivalent to 644,000 tons of pulp), broadleaf pulp imports increased month - on - month to 1.309 million tons; coniferous wood chip imports increased for two consecutive months to 21,000 tons (equivalent to 11,000 tons of pulp), coniferous pulp imports decreased for two consecutive months to 821,000 tons. The short - fiber to long - fiber import ratio was 2.35 times, with a 10.5% year - on - year increase in the average of the past 12 months, which is bullish for the broadleaf - coniferous spread [16] - As of May 2025, the use of broadleaf pulp in domestic papermaking decreased month - on - month to 2.224 million tons, and the use of coniferous pulp decreased for three consecutive months to 523,000 tons. The consumption ratio was 4.26 times, with an 8.0% year - on - year increase in the average of the past 9 months, which is bullish for the broadleaf - coniferous spread [16] International Pulp and Paper Trade Impact on SP Unilateral - In May 2025, the domestic pulp import value increased month - on - month to $1.906 billion, and in April, the US pulp import value decreased month - on - month to $308 million. The combined value decreased by 3.6% year - on - year in the past 3 months, which is bearish for SP but with limited impact [24] - In May 2025, the total export value of paper products from Japan, South Korea, and Brazil was $565 million, with a 5.4% year - on - year decrease in the past 3 months, which is bearish for SP [24] Port Inventory Impact on SP Unilateral - As of July 4, 2025, the total pulp inventory in major ports was 2.392 million tons, a 9.8% year - on - year increase, which is bearish for SP [30] Port Inventory Impact on Broadleaf - Coniferous - As of July 4, 2025, the ratio of the four - port inventory to the warehouse receipt inventory increased for four consecutive months to 8.97 times, with a 60.7% year - on - year increase in the average of the past 6 months, which is relatively bearish for broadleaf pulp [35] Manufacturing PMI Impact - As of June 2025, China's manufacturing PMI increased for two consecutive months to 49.7 points, with a 0.2% year - on - year increase in the 12 - month average, with the growth rate narrowing [36] - As of June 2025, the US manufacturing PMI increased month - on - month to 49.0 points, with a 1.3% year - on - year increase in the 12 - month average, with the growth rate narrowing, which is bearish for SP [37] Domestic Papermaking Output and Inventory Impact on SP Unilateral - In April 2025, domestic papermaking electricity consumption decreased month - on - month to 838 million kWh, with a 0.6% year - on - year increase in the past 12 months, with the growth rate narrowing, which is bearish for SP [46] - In April 2025, domestic papermaking finished - product inventory increased for four consecutive months to 77.57 billion yuan, with a 5.6% year - on - year increase in the past 12 - month average, which is bearish for SP [46] US Policy and International Oil Price Impact on SP Unilateral - As of early July, the US economic policy uncertainty index increased month - on - month to 536.4 points, with an 84.5% year - on - year increase in the past 12 - month average, which is bullish for SP [52] - As of early July, the Brent crude oil price decreased month - on - month to $68.3 per barrel, with a 21.3% year - on - year decrease in the past 3 - month average, with the decline rate narrowing, which is bullish for SP [52] International Trade and US Dollar Index Impact on SP Unilateral - In May 2025, the domestic import and export volume decreased month - on - month to $529 billion, with a 2.1% year - on - year increase in the past 6 - month cumulative value, with the growth rate narrowing, which is bullish for SP valuation [58] - In June 2025, the real broad - based US dollar index decreased for five consecutive months to 114.9 points, with a 5.7% year - on - year increase in the past 9 - month average, which is bearish for SP [58]